Agrifirm satisfied, despite lower profit and volumes

Despite lower turnover, decreasing feed volume and lower profit, Agrifirm can look back with satisfaction on the past year. In a challenging market, the feed activities in the Netherlands managed to hold up well, while the plant division saw its market share increase. On balance, the cooperative recorded a net profit of EUR 30,6 million.

Agrifirm faced challenging market conditions in 2016. Examples include the low milk en pig prices, bad weather conditions in important growing areas, the bird flu in poultry farming en the phosphate problems in dairy farming† Feed prices, on the other hand, are quite stable, thanks to calm commodity markets. On balance, Agrifirm achieved a turnover of more than 2,1 billion euros. Compared to 2015, the profit margin decreased from 0,5 percent to 1,5 percent. This brought the gross result to 31,7 million euros, a decrease of almost 46 million compared to the previous financial year. Agrifirm's members may jointly distribute 2016 million euros over 33.

According to CEO Dick Hordijk, Agrifirm closed 2016 well. 'We are a strong cooperative company that is ready for the next step as a major international player.' There are also opportunities for this, because according to Hordijk Agrifirm is financially sound and the company is well on the map. For example, solvency, as a measure of the balance sheet, rose to 53 percent in the past year.

Focus on core activities
With the sale of the remaining interest in Plukon and the sale of the remaining 51 percent of shares, Agrifirm tried in 2016 to bring focus to its core activities. South America will be an important focus area for the feed supplier, with a view to purchasing Uruguayan premix manufacturer Nutral. Also the Polish compound feed manufacturer Paszmark was added to the portfolio. In Germany, on the other hand, activities were divested and restructured. This led to a strategic partnership with the German player DTC and the sale of the plant in Neuss. Agrifirm is also entering the German market from the Netherlands. From the northern factories, Agrifirm will focus on the sale of animal feed in the border regions in Germany.

Agrifirm Plant completely phased out its Plant activities in Germany last year because the yield was too low. At the end of 2016, Agrifirm Plant signed a letter of intent to collaborate with the Chinese Beidahuang Black Soil Potato Industry† With this, the Plant division is trying to further shape its international services.

Expectations 2017
In 2017, Agrifirm expects improved market conditions in livestock farming. In 2016, Agrifirm Feed saw a loss of customers among pig farmers, mainly due to pressure on debtors and competition from price fighters. By adapting the factory in Veghel, which will become operational in July, Agrifirm says it is well on its way to win back customers.

With regard to cattle farming, Agrifirm is taking into account a decrease in the dairy herd during the year in 2017 due to the consequences of the phosphate reduction plan† In the poultry sector, Agrfirm believes that the market is increasingly moving towards concepts. With the introduction of the 'Slowfeed feeding programme', the Feed division is trying to make a proactive contribution to this. 

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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